Poland's Far-Right Kingmaker: A Geostrategic Shift in EU Funds and Energy Policy

The 2025 Polish presidential election is poised to redefine the nation’s energy and infrastructure priorities, with far-right "kingmaker" Slawomir Mentzen and conservative candidate Karol Nawrocki leveraging their influence to redirect EU funding toward nationalist projects. This shift—from green tech to fossil fuels and construction—creates a unique investment opportunity in Polish equities and bonds ahead of the Q4 election. Here’s why investors must act now.

The Political Landscape: A Fork in the Road

Mentzen, leader of the Confederation party, holds the balance in a three-way race with pro-EU centrist Rafal Trzaskowski and nationalist Nawrocki (backed by the PiS party). Polling at 11%, Mentzen’s anti-EU migration stance and opposition to renewables subsidies have positioned him as the decisive swing vote. His platform advocates for "energy sovereignty" through coal and nuclear power, while rejecting EU climate mandates. Nawrocki, at 26%, similarly prioritizes fossil fuels and a "Europe of Homelands" that resists integration—both candidates could realign Poland’s energy strategy to favor traditional industries.

This dynamic threatens to fracture Poland’s access to EU climate funds. The Just Transition Fund (JTF) and Recovery and Resilience Facility (RRF), totaling over €437 billion, are contingent on compliance with EU climate targets. Mentzen’s policies risk excluding Poland from these funds, diverting capital instead toward nationalist projects like coal infrastructure and construction.

EU Funding Shifts: From Green to Gray

Current EU priorities in Poland’s energy sector include renewables (solar, offshore wind) and grid modernization. However, far-right influence could reroute funds to fossil fuel-centric initiatives:
- Coal and Construction: Projects like the Bełchatów lignite plant (Europe’s largest) and regional infrastructure upgrades (e.g., roads, pipelines) would gain favor.
- Nuclear Power: Nawrocki’s push for U.S.-backed nuclear plants (e.g., the $49 billion PGE project) could secure funding if aligned with nationalist security goals.

Investment Recommendations: Play the Policy Pivot

Equities to Buy Now:
1. PGE (PGE.WA): Poland’s largest energy firm straddles coal and renewables. Its coal assets will thrive under a nationalist government, while its pumped-storage hydro projects (funded by the EIB) offer a buffer against green backlash.
2. Mostostal Warszawa (MST.WA): A leading construction firm specializing in infrastructure projects. A Mentzen/Nawrocki win would boost demand for roads, pipelines, and coal-related facilities.
3. Grupa LPP (LPP.WA): A construction materials supplier poised to benefit from increased infrastructure spending.

Bonds to Hedge Against Risk:
- Poland’s 10-year government bonds: A Mentzen-aligned government could stabilize yields below 4% if nationalist policies reassure investors about fiscal discipline. However, monitor EU penalties (e.g., JTF exclusion) that might spike yields.

Risks and Triggers to Monitor

• Election Outcome (Q4 2025): A Trzaskowski victory could reignite green funding, penalizing fossil fuel stocks.
• EU Penalties: If Poland’s NECP submission remains delayed or inadequate, the EU could withhold JTF funds, impacting construction firms.
• Geopolitical Volatility: Russia’s actions in Ukraine could amplify calls for energy independence, favoring coal/nuclear investments.

Conclusion: The Clock is Ticking

The far-right kingmaker’s influence offers a window to capitalize on Poland’s policy realignment. Investors who position in construction stocks and bonds now can profit from the shift to nationalist energy priorities—before the election’s outcome solidifies the new direction. Act swiftly: The next 18 months will determine Poland’s energy future, and with it, the fortunes of its economy.

This is a moment to bet on Poland’s pivot—before the world catches up.